Confessions of a Dangerous Blogger:

Ah Alan Greenspan, your life reads like a tragedy. Bright young man, graduates summa cum laude from NYU, goes on to receive a Ph.D. Befriends a prominent philosopher and proponent of the free market ideology and writes articles in her books singing the praises of capitalism and the gold-standard. Subsequently awarded a Ph.D in Economics from NYU and then a successful career as an economic advisor, all the while slowly moving away from his free-market friend and mentor. Changing course, following a more political career, beginning to accept a level of government influence in the free market, being appointed as Chairman of the Federal Reserve, controlling the money supply, the interest rates. Compromising, following political expediency, admitting that one can’t be an idealist, all the while espousing free-market ideals. Setting up and presiding over a housing bubble, allowing easy credit, forcing the market to accept it, in diametrical opposition to his professed ideology. Then, passing the reigns over to a new chairman and a few years later seeing the fruits of his meddling come to fruition, with the full knowledge that it was his failed machinations which got them there. Even so, I might have let the old guy retire in peace.

And then he had to open his mouth and say this:

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added:

“I have found a flaw. I dont know how significant or permanent it is. But I have been very distressed by that fact.”

He goes against the free market then has the nerve to blame his mistake on the free market. If the free market had been allowed to work as it should, those loans would never have been made. It was precisely the compromise and eventual abandonment of his principles that was the problem. As his former mentor said “In any compromise between food and poison, only death can win.” This current financial crisis will be his ultimate legacy, and so the tragedy goes.

But when all these bad policy decisions were being made, when Washington was encouraging the Fed to keep interest rates low and to put more people in houses, were there voices of reason to be found? Yes, though no-one seemed to pay any attention. The very same person who ran for President this year and whose economic advice was resoundingly rejected as being “way out there” had this to say in 1999 over a piece of banking legislation that would supposedly deregulate the industry:

Today we are considering a bill aimed at modernizing the financial services industry through deregulation. It is a worthy goal which I support. However, this bill falls short of that goal. The negative aspects of this bill outweigh the benefits….

The growth in money and credit has outpaced both savings and economic growth. These inflationary pressures have been concentrated in asset prices, not consumer price inflation–keeping monetary policy too easy. This increase in asset prices has fueled domestic borrowing and spending.

Government policy and the increase in securitization are largely responsible for this bubble. In addition to loose monetary policies by the Federal Reserve, government-sponsored enterprises Fannie Mae and Freddie Mac have contributed to the problem. The fourfold increases in their balance sheets from 1997 to 1998 boosted new home borrowings to more than $1.5 trillion in 1998, two-thirds of which were refinances which put an extra $15,000 in the pockets of consumers on average–and reduce risk for individual institutions while increasing risk for the system as a whole.

The rapidity and severity of changes in economic conditions can affect prospects for individual institutions more greatly than that of the overall economy. The Long Term Capital Management hedge fund is a prime example. New companies start and others fail every day. What is troubling with the hedge fund bailout was the governmental response and the increase in moral hazard.

This increased indication of the government’s eagerness to bail out highly-leveraged, risky and largely unregulated financial institutions bodes ill for the post S. 900 future as far as limiting taxpayer liability is concerned. LTCM isn’t even registered in the United States but the Cayman Islands!

…My main reasons for voting against this bill are the expansion of the taxpayer liability and the introduction of even more regulations. The entire multi-hundred page S. 900 that reregulates rather than deregulates the financial sector could be replaced with a simple one-page bill.

In other words, if a company knows that the government will be there to bail them out if they screw up and everyone else is making money while they can, you can’t blame them for taking full advantage of the opportunity. Blaming the free market for the favoritism of Washington all the while making the average taxpayer pay for this favoritism again and again is just too much. Are the right people being punished? No, once again it’s the free market run wild which is to blame.

What will inevitably follow this crisis is more regulation leading to more screw-ups down the line. But it’s not the screw-ups which are the biggest concern. It’s the systemic corruption that comes with regulation, for with restriction comes profit. Tie one side’s hands and the other is free to prosper. What we need is more education on what a free market really means, that money can’t be created out of thin air and that the market can’t be duped forever. Alan Greenspan had the opportunity to come clean and return to his roots, but instead opted to shift the blame, as so many douchebags have done before him and will do again. While the free-market (not so) gently crashes.

Update: It seems that Ron Paul had a comment or two to make on Greenspan as well:

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We’re only a few days away from the first US Presidential Primaries and I came across this post in response to an article on Ron Paul.

The only true part of your statement, Waiguoren, is that you discern little. Allow me to quote Bastiat’s ‘The Law’ if I may.

Socialism, like the old policy from which it emanates, confounds Government and society. And so, every time we object to a thing being done by Government, it concludes that we object to its being done at all. We disapprove of education by the State ” then we are against education altogether. We object to a State religion ” then we would have no religion at all. We object to an equality which is brought about by the State then we are against equality, etc., etc. They might as well accuse us of wishing men not to eat, because we object to the cultivation of corn by the State.

We are not against helping other citizens. In fact, it is a moral imperative. However, the role of Government is NOT to rob one citizen of his wealth, to give it to another. Charity and goodwill must be voluntary, or else they are worthless…as worthless as the ‘mandatory volunteer work’ that students are being required to complete before graduating.

You cannot legislate morality. People must be responsible for themselves, and must choose to accept responsibility for their family, friends, and neighbors, but not for the Government to rob them of their wealth, and tell them, “I’m sorry, but us lawmakers in Washington DC decided the money you earned while working would be better spent (insert ‘for the children’ cause here).”

That might’ve been money needed for his or her own family, money needed to give charitably to his own neighbors. When the government redistributes your wealth, its called socialism and tyranny. It doesn’t MATTER how ‘good the cause’ is. Its still a fascist thing to do.

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A few weeks ago, South Park had a trilogy of episodes called Imagination Land, in which terrorists waged war on our imaginations. Despite it being an hilarious series of episodes, I meant to comment on its relevance in the global situation we find ourselves in right now. As a satire it is perfect, even if most viewers won’t read that far into it. In the world today, terrorists have essentially hijacked our imaginations such that we live in fear of their reprisals. As a result, two wars still go on, a third potentially on it’s way in Iran.

In my usual reading of Ron Paul news, I came across this comment about the War on Terror on rollingstone.com, posted by user Republicae. I post it because it sums up what exactly is happening in the war and what the terrorists are really hoping to achieve: the bankruptcy of the United States.

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Eventually, it will become apparent that the ignorance of rage that characterizes our War on Terror, will betray this government, this nation and its people. We have thrown our natural rage into the game of war with those we consider terrorists and an immediate threat to our future however, in that rage we have overlooked several very important and perhaps critical issues that will affect our futures in ways that we are yet unaware.

In all the rhetoric, the hatred that we believe our enemies deserve and the reaction to their attacks we have, it seems, willingly played into their plans while pursuing our quest for revenge and defense. It is commonly stated that the devil is in the details, in this case that is absolutely correct. We have been confronted with an enemy that is not bound by convention, by international boundaries, by nationalities nor even by the values that we have long considered familiar in terms of Western or traditional warfare. There is a very important and critical disparity between the style and effectiveness of our enemies and those of our military efforts based upon our policies. This contrast is most distinct when viewing the degree of effort and expense used to affect each side of the conflict. There is also a very distinguishing difference between the ideals and motivations between the two forces; those differences are rarely taken into consideration and yet because of the nature of this conflict it plays an extremely important role in the overall effectiveness of each side in the conflict itself.The main contrast, that is seldom mentioned or considered when judging the effectiveness of each sides role in this conflict, is the disparity of expenditures needed by each side to effect substantial damage on the other. In the case of the terrorists, the level of expenditure is miniscule compared to that of the United States. As is common with all super-states, our response is natural to the characteristics of such a super-state. In our eyes, the proper response is to throw everything you can at the enemy and it will, at least in our minds, do the job. The problem is that it rarely does in such cases and there is plenty of evidence to support that fact.In the case of al Qaeda and other terrorists groups, the need to produce massive attacks is not needed, especially after the events of 9/11. In fact, a terrorist group need not attack at all, but only use its ability to induce fear, sometimes massive fear, as the ultimate effective and extremely inexpensive tool of their trade. Because of such tactics of potential terror, they need only threaten and it not only achieves a predictable result, but also prompts their enemies to expend massive amounts of resources to defend against the perceived potential attack.

While the threat of physical attack is always to be considered real and dangerous, the more effective and therefore most insidious attack is that of psychological terror. Psychological terror, particularly if it is not recognized, is extremely dangerous because it has the potential of effecting drastic changes in the behavior and character of a society; not to mention the manner and means of the response that society willing to take both domestically and in its dealings with other nations. Psychological terror causes the victim nation to react in ways that while appearing defensive can exacerbate the entire situation and increase both external and internal dangers. It causes reason to be set aside for reaction and places the country in a position where effective decision-making is compromised. The nations center of gravity is pushed off balance, its traditional character is morphed into a vision that eventually becomes unrecognizable and its laws become disposable. Eventually, the effects of the terror are a success and psychological conquest has effectively changed the way the people of the country see themselves, see others, live their lives, believe, behave and conduct their business and affairs. The countrys politics too can easily become contorted, manipulated and, in some cases, extreme.

Both physical and psychological terror will find its ultimate use in causing the economic resources of the country to hemorrhage, bleeding the life-blood from the most vulnerable sector of the society. Given the differences between the expenditures of the terrorists and our own expenditures, it is easy to see that eventually the expense of such a war will take an increasingly heavy toll. Once again, it doesnt take an actual attack to press a country into a massive and extremely costly response; it only takes the correct application of fear to implement its effectiveness on the countrys resources.

While our rage, combined with degree political expediency, has caused us to choose to believe certain things about our enemies, many of those beliefs are not based upon fact or intelligent assessment, but solely upon that rage. In that rage we blind ourselves to a reality that is not only necessary to understand our enemy, but also to effectively counteract and defeat the potency of their methods.

For those who have never read The Principles of War by Carl von Clausewitz, he presented a very powerful argument on the methods of defeating an enemy through attacking that enemy at his Center of Gravity. Now, in our rage we might not think that the terrorists would consider such a strategy as it is spelled out in The Principles of War, particularly because many of us have a carefully manicured vision of the Islamic extremists, but in fact, those crazed Islamofascists have not only read the book, but they have instituted many of the principles found throughout its pages. Abu-Ubayd al-Quarshi stated in his essay: A Lesson in War, that not only had he read it, but that al Qaeda would utilize those principles in its attack on the United States. Of course, in our rage, our anger, we rarely consider such facts or understand the importance of recognizing that our enemies are not just Islamic crazies, but warriors intent on using any and all methods to achieve their goal of defending their religion and their lands from what they view as invaders.

Now, to understand what al-Quarshi was talking about, lets take everything about Islam out of his writings and then read it as though it were a simple plan and explanation of their purpose:

We must understand the American essence and nature, and indeed his center of gravity. A conviction has formed among us that American public or political opinion is not the center of gravity. The actual American center of gravity is its economy. Supporting this penetrating strategic view is that the United States of America is a mixture of nationalities, ethnic groups, and races united only by the American Dream, or, to put it more correctly, the U.S. Dollar and the economic wealth of the nation. We must take away the American Dream. Furthermore, as we have seen, the entire American war effort is based on pumping enormous expense of its military machine therefore, the economy is the weakest sinew of its war effort.

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I am not American and therefore have no chance of voting in the upcoming Primaries or the election. But I can’t help but be fascinated by the race for President that is currently unfolding. The actions of the US have not so far impinged upon my life, so far as I can tell, so it strikes me as strange that I would be so interested. I have come to the conclusion that the reason for it is that the democratic process is purely and simply, entertainment.

The elections follow the typical dramatic structure. There is a climax (the election), there are good guys and bad guys, front-runners (Hillary and that dickhead Giuiliani) and underdogs (Mike Gravel and Ron Paul). There is backstabbing, conspiracy and underhanded politics everywhere. And this drama is covered from numberous angles 24/7. What better entertainment can you get?

This would be funny if it wasn’t for the fact that the result of this charade will decide the fate of a nation… oh, sorry American readers *the fate of the universe*. However, only Americans have to live in their country after all this is through. We, who live in the rest of the world, keep watching in amazement, as though it was a TV show entitled, Who Will Those Idiots Elect Next?

I’m not calling all Americans idiots. For I have been duped as well by the leaders of my nation, and the world in general. This terrorism thing has got everyone fearing their security and in turn supporting half-baked invasions and attacks against our privacy and civil liberties. Not just terrorism either. We have wars against drugs, against crime, against poverty, against whatever. Just to manipulate support through fear.

Fear causes people to react emotionally, rather than use their powers of reasoning. If you get enough people in a panic, you can manipulate them to virtually any end. But who is doing this manipulation? Who is causing the people to panic? The terrorists? We could believe the crap that we are spoon fed through our media or from our officials, that they hate our freedom and they want us all to convert to Islam. Or we can do a bit of thinking and come to different conclusions.

In our democracies, our leaders make decisions on our behalf. Often, we are deaf to what these very decisions are. We are sheltered from full knowledge of what we do. Our media reports the things that are deemed relevant to us. Do we hear about the millions who die when we impose sanctions against a country? Not really. Do we get the chance to hear the point of view of those who hate us, and their reasons for doing so? Not as such. Is the fact that top ranking officials of the CIA and FBI come out and say that these agencies actually sponsor terrorist attacks, such as the one against the USS Cole, brought outfor public attention? No again.

I’d like to pose a question. Who is directly benefiting from this war? We hear that the war is costly for the American taxpayer. So where is this money going? Well to the companies that are making the ammunition, or getting contracts to repair what has been blown up of course.How would a long, drawn-out war affect a company like that, which is making millions and millions of dollars profit, monthly? Doesn’t that company have a very real interest in keeping the war going? Defense companies, oil companies, construction companies. Who do you suppose they would support among the presidential nominees? Yep, the biggest warmonger on the stage of those debates: Rudy “911″ Guiliani.

Hilary Clinton, Barack Obama, Mitt Romney, Rudy Guiliani. Where does most of their money come from? Corporate interests. Checkthe Center for Responsive Politicsfor the exact figures. Why would certain candidates get millions from one industry and not others if not to influence policy? More money means more air time, more air time means more voters influenced into voting for them. Fear of the unknown resonates in politics ever so loudly among a populace that would rather be entertained than informed.

If the media was at all interested in a democratic election, they would present each candidate with equal time, and allow their views and opinions to be heard in entirety. Instead, we hear how much money they raised, rather than the issues they propose to solve. It has been highlighted on numerous websites, the disparate amount of time assigned to each candidate in the debates. Raising money from corporate interests translates into credibility, top-tier status, and air time.

My point is, if war is in the interests of these companies because they profit from it, and we have a war currently underway feeding this very interest, despite the apparent desire of the majority to get out of the war, doesn’t this indicate a level of corruption in the government? It indicates that those campaign contributions are far from benign. The fact is, the dumber the Americans are, the greater this system works. The less informed, the more entertained and spoon fed they become, the easier they are to manipulate into fear, into emotional voting. It’s been noted that the educational system in the U.S. is failing, healthcare too. Maybe this is no accident.

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I’ve been following US politics a lot more than normal and it’s making me depressed. I don’t know if it’s just me, but I can’t wait for the election so that George W. Bush will, once and forever, be gone. Yet, looking at the candidates that line the stages of these debates, it seems that the US will be getting another moron in office quite soon. This is, in itself, quite a normal thing. Politicians are always like that. People who make a career out of saying they know what you want aren’t usually up to any good. We, the voters, seem to be happy with this kind of society because we keep voting the dickheads in. But now I’m starting to see exactly why this is happening.

When we were in high school, we had the task of reading the news and critiquing it. We were told to examine different sources for consistency and not to just believe everything we read. This was, in my humble opinion, one of the most valuable skills to teach us impressionable youngsters. Flash forward to 2007 and me in my room scanning Google News. Now, during the first debate, I was particularly impressed with a guy named Mike Gravel, a candidate whom nobody had heard was running. Mike who? people said. That was, until you hear the guy speak. It was like a real person on that stage, not a prop-speech-reading robot. He spoke clearly and directly and never dodged an issue once. In the following days after the debate, he made appearances on a number of different networks, giving his opinions on everything from gay marriage, to drugs, the war and healthcare. The more people threw at him, the more you became impressed because here was a guy who you knew was speaking off the top of his head about subjects which he was passionate about. The best part was, he made absolute sense!

The social news website digg.com featured article after article of user-submitted links about the man and his policies. He was generating a genuine buzz from people who wanted to hear more. Yet, go to Google News and you hear about Clinton and Obama. I suppose this is to be expected to a degree. The mainstream press had little time for candidates they deemed non-contenders, even expressing this view in interviews with Gravel. Yet, when it comes to unedited news stories, digg, and de.licio.us was awash with news about the candidate.

The same thing happened with Ron Paul, a nine-term Republican, former candidate for the Libertarian party. His post-debate buzz was enormous, coming from the outside to win the debate in MSNBC’s audience poll. The network, however, quickly refuted this poll as unscientific and withdrew it from their website. Despite the obvious sense that he spoke and rapport he developed with the audience present, Google News was silent on the matter. As the buzz hit the social bookmarking sites, the pundits all jabbered on about the front runners, despite their lackluster performance and low polling results.

Spin forward even more to a couple of days ago, as the second Republican debate takes place. Asked about the causes of 9/11, he said that American foreign policy was to blame. “They attacked us because we’ve been over there; we’ve been bombing Iraq for 10 years,” Paul stated. His view is shared by a little thing called the 9/11 Report, an official investigation into the causes of the 9/11 attack. But who should enter the fray once the words 9/11 are mouthed but uncle Rudy, who just had to remind everyone that he was there and that he was appalled by the congressman’s words. He even urged him to retract his statement. Rudy then set the record bent with the Bush mantra “they hate our freedom”. It was pathetic and in obvious contention with the facts, but it got cheers from the audience and endorsements from the other candidates.

In the news the next day, the papers were writing about how Guiliani was up and Paul was on the out, despite winning the MSNBC poll again and coming second in the Fox poll. No-one seemed to address the issue of Guiliani getting all the facts wrong, or just ignoring their existence. The media continued to promote the idea that Paul was wrong. For everyone who didn’t learn the lesson in high school, you’d be wise to note that media has its own agenda and it’s pushing that agenda even as we speak. Quite simply, certain topics are black topics, hot potatoes of debate which have to be thrown off as fast as possible, whether you’re standing on the stage or in the newsroom. Mouth anything but the fluff you’re meant to say and someone will come down on you hard.

Here’s a YouTube clip to illustrate the venom that this response drew from a Fox News pundit:

Voters can be manipulated. Truth can be spun. These are the rules of politics. But who is playing politics more, the candidates or the news outlets? Or are some of them on the same team? Even when someone speaks candidly and openly on the stage, like Paul and Gravel did, it is immediately spun by commentators who seem to have a thousand facts at their disposal but never once practice honesty. It’s one thing to say a true thing and quite another to be fully honest. Meanwhile, the rest of the world sits on the sidelines and wonders just how stupid the American voters are. It’s a brilliant strategy that has been paying off big for George W. Stupid people are easier to control. Stupid people respond to simplistic analyzes of complex problems. Stupid people vote for guys who are down to earth like them. So why would it be in any politician’s interest to fix education and make people smarter?

Americans aren’t dumb though, they’re just too proud for their own good. An evil cloaked as a good is far more dangerous than pure evil. For evil which seems good is merely a Trojan horse that we invite into our hearts and minds, unable to see the danger lurking within. Americans can’t admit that their system is letting them down. This democratic system that is idolized nationally and implemented in foreign countries around the world isn’t quite the beacon of freedom that most US citizens are told to believe it is. In the wake of 9/11 there has been a frenzy of nationalism to the point where anyone questioning America is strung up and burned, despite the truth of their claims. The hard medicine that America needs, however, it may well get too late. As long as big business is allowed to line pockets and push agendas into law and the media, the cycle will continue and America will lose credibility and money and finally control over it’s destiny.

Now I remember why I don’t usually follow politics. It’s the same reason I don’t watch WWF; I just don’t like rigged games. Look closely at the next debate lineup. If you squint your eyes and stare close enough, you might just be able to make out the strings.

PS. Here are some of the stories that I’ve been reading and say what I’m trying to say, but better:

• Do we really want another ignoramus in the White House?

• Can We End the American Empire Before It Ends Us?

• ACTION: Contact Tim Russert (“Meet the Press”)

• Media Matters calls out Mainstream Media on distortion of Paul’s words

• Why did Osama Bin Laden attack America? Let’s find out, in his own words.

• George Noory asks why Mainstream Media is Ignoring Ron Paul

• Never heard the “blowback” explanation for 9/11–Guiliani caught lying?

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